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2012 South Florida Profile: Down Real Estate Market Overshadows Job Gains, Growth

South Florida Grocery Profile

Last updated on August 16th, 2012 at 12:08 pm

[gn_note color=”#6666ff”]The 2012 South Florida Profile originally ran in the March 2012 edition of The Shelby Report of the Southeast. The profile will be published on theshelbyreport.com one month after it has run in print.[/gn_note]

by Kristen Cloud/staff writer

Florida’s grocery industry grew between 2 and 2.5 percent over the last year. The growth in South Florida, specifically, mirrors that of the rest of the state, according to John Fleming, com­munications director for the Florida Retail Association.

“South Florida’s not better or worse than the state as a whole,” he says. “The strongest area is probably the Orlando area, which is considered central Florida. Right now the unemployment rate in Orlando is a little bit better than it is in other parts of the state.”

Florida’s unemployment rate is 9.9 percent, higher than the national average of 8.3 percent but the lowest it has been in at least a year, and down from 12 percent a year ago.

“It is going in the right direction, we are growing jobs,” Fleming says. “Retail trade as a whole is growing jobs. Grocery stores are the biggest component of the food and beverage category, (and) we probably added somewhere around 4,000 jobs in 2011. That’s out of retail trade as a whole (which added) probably 30,000 or so jobs.”

And, though South Florida experienced promising ­private-sector jobs gains in 2011, it still ranks among the worst in regaining jobs lost during the recession, based on a report by On Numbers. The slumping real estate market isn’t helping matters.

“As a whole our state is still suffering from the depressed real estate market,” Fleming says. “Florida was a little bit more into real estate than other states were, so we have taken a harder hit during the recession. It’s probably going to take us longer to get out of that.”

That certainly appears to be the case in the southern portion of the state, as foreclosure activity is up in two of South Florida’s three major counties. That activity is expected to increase during the next few months, given the finalized mortgage and foreclosure settlement reached in early February with five of the nation’s largest lenders, according to RealtyTrac.

The South Florida Business Journal reports that data in RealtyTrac’s January 2012 U.S. Foreclosure Market Report showed that, in the tri-county area, Miami-Dade had the biggest ­increase in activity with foreclosure filings, skyrocketing 50 percent year-over-year to 3,737, and Broward saw its filings rise 11.5 percent to 2,772. Palm Beach was the only county to see ­filings decrease, shrinking 4.5 percent to 1,982 filings.

Miami-Dade’s volume of filings was greatest, with one out of every 265 homes getting a filing. In Broward, one out of every 292 homes received a notice, and there was a filing for one out of every 335 homes in Palm Beach, the Journal reports.

Florida is one of a handful of states that saw ­filing activity increase for the first time in 12 months. It ranks sixth in the country as a result of the increase, according to RealtyTrac.

Default notices increased 36 percent, year-over-year, in Florida. In fact, the state’s default notices have increased on an annual basis for three straight months.

Trader Joe’s, more natural food stores setting up shop

Statewide, the grocery business remains ­relatively strong. “The grocery industry’s a little bit behind other retail sectors (in terms of growth),” Fleming says. “It’s still growth, and it’s still good growth, but it’s behind people like apparel stores or department stores—they’re still growing a little bit faster.

“But (grocery) stores continue to open; we’ve probably added close to 200 grocery stores statewide over the year.”

South Florida, particularly, has become somewhat of a hub for natural and organic-geared stores. Popular specialty grocer Trade Joe’s made its debut in the state Feb. 10 with the opening of a store in Naples.

Less than a week after its opening, the store’s manager, Bernadette Pauls, told The Shelby Report that business had been “super.”

“We’re getting a lot of traffic from all over the place,” she added.

“I was at the opening for two reasons—to see a bunch of TJ fans enjoying themselves (and they did!) and to pick up some TJ items I’ve gone too long without,” one Naples Trader Joe’s customer writes at naplesnews.com. “It’s a lifestyle—shopping at TJ’s ain’t a chore, it’s a passion!”

The 14,000-s.f. Collier County TJ’s occupies a former Borders bookstore at Granada Shoppes at 10600 Tamiami Trail North. It embraces the company’s old-fashioned feel, with hand-painted murals reflective of the local community, reports The Sun Sentinel. In the rear of the store, shoppers can sample foods at an area called the Dockside Galley. The kiosk provides demonstrations daily, offering meal suggestions and an opportunity to taste Trader Joe’s foods and beverages. The store stocks between 2,000 and 2,200 individual items, both domestic and imported and all of which are available for sampling.

Trader Joe’s in Naples has its share of competition, however.

It is less than a mile away from Whole Foods, which opened in Mercato in September 2008, and the first ­hybrid grocery store/café for Publix that opened in October 2010 in the Marketplace at Pelican Bay.

Though Monrovia, Calif.-based Trader Joe’s has no ­immediate plans to expand into Broward, Miami-Dade or Palm Beach counties, it has announced it will head up the Gulf Coast to open a Sarasota store later this year. Still, Palm Beach officials are petitioning to bring the grocer to the East Coast side of the state.

The Sentinel reports that the West Palm Beach Downtown Development Authority has begun production on a marketing film called “What would I trade for Trade Joe’s,” where city officials will give up precious items in return for a ­grocery store opening in downtown Palm Beach.

While February’s opening in Naples marked Trader Joe’s entrance into Florida, other grocers are expanding their presence in The Sunshine State.

Whole Foods plans to open a new 35,000-s.f. Pembroke Pines store on Pines Boulevard at Northwest 155th Avenue this spring. The Texas-based chain also has signed on to open a 37,000-s.f. store at 200 S.E. Second St. in the fourth quarter of 2013 at the Metropolitan Miami complex, a multibillion-dollar mixed-use project. It will be the grocer’s first store in downtown Miami.

In addition, The Fresh Market opened its first east Broward store at 424 North Federal Hwy. in Ft. Lauderdale on Feb. 1. Its opening marked the company’s 28th store in the state.

The 23,000-s.f. store includes a bakery that produces 30 freshly baked breads and 14 different pie varieties daily, a full-­service meat counter with freshly ground beef, a selection of ready-to-serve entrees, fresh seafood, more than 200 domestic and imported cheeses and more than 400 items in the produce department as well as a large organic selection.

These well-known natural food retailers, as well as independents and larger chain supermarkets like Lakeland-based Publix, will continue to see steep competition from discount retailers like Walmart and Target, according to Fleming.

“…Target and Walmart, quite a while ago, started selling groceries and they have continued to expand those offerings,” he says. “Target, in particular, is developing store concepts to sell more food products. There’s definitely more competition in the grocery arena because of that.”

The Latino demographic also will continue to keep competitors on their toes.

While Latino-owned chains like Sedano’s, with many stores in both South and central Florida, others, including Publix, have developed Latino-focused stores (Publix Sabor) in markets like Miami.

“The Hispanic market is huge in Florida and growing, and it’s only going to get bigger,” Fleming says. “What has happened is that a lot of grocery stores have grown up catering specifically to the Hispanic market and, as that began to happen more and more, you saw some of the more mainstream grocers like Publix begin to add more of a Hispanic focus to their product lines and their store concepts and things like that.”

Russian chain vows to vie with Walmart in U.S., starting in Miami

Retail competition isn’t likely to let up in 2012 and beyond. It’s actually set to grow with the introduction of a Russian-based store chain.

Russian businessman Andrei Rogachyov, who founded major supermarket chains Pyaterochka and Karusel in Russia, plans to open discount stores in the United States with annual revenues of $1 billion, reports indicate.

Rogachyov’s investment vehicle, AgroTrade International BV, plans to launch 60 stores this year in Florida—starting in the Miami/Fort Lauderdale area—aimed at low- and medium-income customers.

Based on an AgroTrade America job posting on LinkedIn for a store operations director, the project entails a “chain of neighborhood markets with 4,000 SKUs of grocery merchandise and slated for an aggressive expansion.”

By 2016, the discount store chain plans to operate 400 stores and compete with Walmart on an equal footing. The stores are expected to be 5,000-7,500 s.f.

The name of the new discount store chain is not yet known but AgroTrade America already has registered its ­trademarks Okie-Dokie, Okey-Dokey and Doke in the U.S. and plans to register O’key, O’kay, Real Buy Nearby, Bonjour and Voila!

Legislators consider food stamp restrictions

On the lawmaking front, Florida legislators are considering implementing restrictions on what consumers can purchase with food stamps in an effort to promote better health and curb childhood obesity among the poor.

Bills working their way through the House and Senate would bar Florida’s 3.3 million food stamp recipients from using their government-issued debit cards on soda, candy and other junk food, reports the Sentinel. Among the restricted items: any food containing trans fat, Jell-O, Popsicles, ice cream, popcorn, pretzels, pies, muffins and all sweetened drinks—­including chocolate milk, blended juice drinks and Capri Sun.

South Florida’s Hendry County has the greatest number of food insecure residents, with 23 percent of its residents considered food insecure; a significant number of those are children. Florida’s largest ­counties—Dade and Broward—have 432,990 (17.6 percent) and 281,480 residents (16 percent), respectively, who are considered food insecure.

If the bills pass in Florida, the new ­restrictions would need federal approval since food stamps are federally funded. The feds have shot down similar efforts to ban food stamp use for soda and candy in Minnesota (2004) and New York City (2010).

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